Question: Laptop computers produced by a company have an average life of 38.36 months. Assume that the life of a computer is exponentially distributed (which is a good assumption).

1. What is the probability that a computer will fail within 12 months
2. If the company gives a warranty period of 12 months, what proportion of computers will fail during the warranty period?
3. Based on the answer to ( b ), would you say the company can afford to give a warranty period of 12 months?
4. If the company wants not more than 5% of the computers to fail during the warranty period, what should the warranty period be?
5. If the company wants to give a warranty period of three months and still wants not more than 5% of the computers to fail during the warranty period, what should be the minimum average life of the computers?

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